Definitions for "Buffer Stock"
Goods set aside and reserved for sale specifically to balance out the market in the case of a shortage of that good. In the case of a surplus, more off the good would be bought and set aside.
A quantity of goods or articles kept in store to safeguard against unforeseen shortages or demands.
A certain level of inventory maintained on account of sales demand and lead time variations so as not to incur an out of stock situation.
A large quantity of a commodity held in storage to be used to stabilize the commodity's price. This is done by buying when the price is low and adding to the buffer stock, selling out of the buffer stock when the price is high, hoping to reduce the size of price fluctuations. See international commodity agreement.
See Safety Stock